Our Insolvency Team has recently handled two separate cases surrounding Vesting Orders, involving properties owned by companies that had been dissolved for quite some time. In both instances, the six-year window for applying to restore the company via the Court had long expired. Fortunately, both clients were able to provide evidence that, at the time of dissolution, the company was only holding legal ownership (title) of the properties on behalf of third-party beneficial owners.
In other words, the company was acting as a bare trustee, meaning it had no real control or beneficial interest in the properties—it was merely holding them in name only. The third-party beneficial owners were the true owners, with the right to benefit from the properties, even though the company was the official legal owner on record.
What Happens To Property When a Company Is Dissolved?
When a company is dissolved, any property that it beneficially owns automatically passes to the Crown. However, if a property was only legally owned by the company—but beneficially owned by a third party—there is an alternative legal route to reclaim ownership. In such cases, an application can be made to the Court to transfer legal title to new trustees, typically the original beneficial owners at the time of the company’s dissolution.
What Is A Vesting Order?
A vesting order is a legal mechanism that allows the transfer of ownership (or control) of property from one party to another, typically ordered by a court. It can be used to transfer ownership of property held by a dissolved company.
A Rare But Significant Issue
Applications of this nature are relatively uncommon, making it particularly unusual for our team to handle two such cases in quick succession. If you discover that a property you believed you owned is, in fact, still in the name of a dissolved company, there are legal options available to reclaim rightful ownership.
Can You Help With Insolvency?
Company dissolution and property ownership issues can be complex, requiring specialist legal knowledge to navigate successfully. If you are facing a similar situation or have other insolvency-related concerns, our team of experts is here to help. Use the form below to get in touch with us for tailored advice and guidance.
Disclaimer
The contents of this blog or any other published by Talbots Law cannot be considered as legal advice. You should take no action without prior consultation with a qualified solicitor or legal professional.